New Delhi, Jan 19 (IANS): Keeping aside the 1995 Purulia arms drop case in which Danish national Kim Davy played a key role, India and Denmark have boosted their bilateral relationship and are now planning to forge a strategic partnership, Danish Prime Minister Lars Lokke Rasmussen said here on Saturday.

Speaking to the media on the sidelines of the inauguration of a Danish Cultural Institute, he said that both he and Prime Minister Narendra Modi have agreed that Kim Davy is a judicial issue and is separate from bilateral ties.

"Prime Minister Modi and I had agreed that this is a judicial issue," he said.

"We talked about that with him (Modi) when we met in Stockholm in April last year (on the sidelines of the first-ever India-Nordic Summit)."

Rasmussen said he saw this problem as solved in the political sense.

"There is a dialogue between our authorities," he said. "What we agreed last year is that we can rely on these independent authorities."

The Danish Prime Minister also said that this issue did not come up for discussion at all during his meeting with Modi on the sidelines of the Vibrant Gujarat Summit in Gandhinagar on Friday.

The Purulia arms drop case is a pending legal case regarding an incident on December 17, 1995 in which unauthorised arms were dropped from an Antonov An-26 aircraft in Purulia district of West Bengal.

The chief accused -- Davy (real name Niels Holck) -- claimed it was a conspiracy of the then Congress government at the Centre, together with Indian intelligence wing RAW and Britain's MI5, to overthrow the then Communist government in West Bengal and he was given assurances from the Central government about his safety and return to Denmark.

He also alleged that politician Pappu Yadav, in association with then Prime Minister P.V. Narasimha Rao, facilitated his safe exit from India.

Rasmussen said that during his meeting with Modi on Friday, both sides agreed to cooperate in different fields like smart cities, renewable energy, maritime sector and waste water management.

"What I regard as the most important outcome is that we agreed that we should be preparing a strategic partnership," he said.

"We already have strategic partnerships with China and South Korea."

On reports of India and Denmark agreeing to set up research platforms, Rasmussen said one example is the renewable sector where both sides have decided to establish a kind of centre of excellence.

"It will not be a physical structure but it will be a partnership bringing India and Denmark (together) on windmill technology," he said. "We are already working in India."

The Danish Prime Minister said this partnership will be driven by his country's embassy here and an advisor in this specific area will be appointed in the mission.

On the issue of free trade in the face of India and the European Union (EU) still grappling to sign the Bilateral Trade and Investment Agreement (BTIA), he said Denmark is "really interested in free trade, especially in these days when you have some kind of an uncertainty".

He referred to US President Donald Trump's calls for protectionism and said the EU should be among those advocating free trade.

Negotiations for the BTIA between India and the EU started in 2007 but were put on hold in 2015.

Those in the know say that after India renounced its bilateral investment treaties (BITs) with all countries, investments from European nations are now not protected.

India has terminated all BITs following a new BIT model New Delhi released in December 2015.

The 28 EU member states, including Denmark, have now passed on the responsibility of investment protection negotiations to the EU.

Rasmussen said if and when India and the EU sign a free trade agreement, "you will find Denmark standing in the corner".

With China playing an increasingly leading role in the world and the US gradually ceasing to do so under Trump, he said Europe must play a leading role.

"We should step out in all these different areas," he said.

Rasmussen welcomed the fact that China wants to play a leading role but said he feels there should be a level playing field.

"But basically, I think it is good that we now have new world players who want to play their role like India," he said.